Filed 11/18/22; Certified for Publication 12/12/22 (order attached)

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIFTH APPELLATE DISTRICT

AMERICAN CHEMISTRY COUNCIL et al.,

Plaintiffs and Appellants,

v.

DEPARTMENT OF TOXIC SUBSTANCES 

CONTROL et al.,

Defendants and Appellants.

F082604

(Super. Ct. No. 19CECG02938)

OPINION

APPEAL from a judgment of the Superior Court of Fresno County. Ana I. 

de Alba, Judge.

Sidley Austin, Sean A. Commons, Paul J. Zidlicky and Joseph T. Zaleski for 

Plaintiff and Appellant American Chemistry Council.

Atkinson, Andelson, Loya, Ruud & Romo, Brian M. Wheeler and Andrew M. 

Aller for Plaintiff and Appellant General Coatings Manufacturing Corp.

Rob Bonta, Attorney General, Edward H. Ochoa, Assistant Attorney General, 

Sarah E. Morrison, Catherine M. Wieman and Lani M. Maher, Deputy Attorneys 

General, for Defendants and Appellants.

-ooOoo-
2.

This case involves an appeal and cross-appeal following the trial court’s 

determination that the Department of Toxic Substances Control (the Department) acted 

within its authority and properly complied with the California Administrative Procedure 

Act (APA; Gov. Code, § 11340 et seq.) but violated the California Environmental Quality 

Act (CEQA; Pub. Resources Code, § 21000 et seq.) when it enacted a regulation listing 

spray polyurethane foam systems containing unreacted methylene diphenyl diisocyanates 

(spray foam systems) as a priority product under California’s “Green Chemistry” law

(Health & Saf. Code, §§ 25251–25257.2) (the listing regulation).

1 Appellants in this 

case, American Chemistry Council (ACC) and General Coatings Manufacturing Corp. 

(General Coatings), challenge the Department’s actions on two grounds. First, that 

listing spray foam systems as a priority product was in excess of the Department’s 

authority under the Green Chemistry law and its enacting regulations, the Safer 

Consumer Products regulations. Second, that the Department violated the APA in 

multiple ways when enacting the listing regulation. The Department raises a separate 

issue in its cross-appeal that challenges the trial court’s determination that it violated 

CEQA. The Department argues the trial court’s ruling was incorrect, but also that the 

claim should have been deemed untimely under CEQA’s statute of limitations. For the 

reasons set forth below, we affirm the trial court’s determination that the Department 

acted within its authority and within the requirements of the APA when it enacted the 

listing regulation. We then reverse the trial court’s finding of a CEQA violation on the 

ground that the claim was untimely under the statute of limitations.

OVERVIEW OF THE GREEN CHEMISTRY LAW AND THE SAFER 

COMSUMER PRODUCTS REGULATIONS

Given the importance of the Green Chemistry law and the Safer Consumer 

Products regulations to both the overall understanding of the factual record and many of 

1 Named as a defendant with the Department is its Director, Meredith Williams.
3. 

the core issues in this case, we begin by summarizing both the law and the regulatory 

structure. 

Overview of the Green Chemistry Law

In 2008, article 14, the Green Chemistry law, was added to chapter 6.5 of 

division 20 of the Health and Safety Code, the chapter on Hazardous Waste Control. 

(See Health & Saf. Code, §§ 25251–25257.2, added by Stats. 2008, ch. 560, § 1.) 

Although amended throughout the years, the statutory scheme itself remains relatively 

sparse. It consists of definitions, two statutes providing guidance for and authorizing 

additional regulations, an evaluation process for generating those regulations, the 

establishment of a green ribbon science panel and toxic information clearinghouse, 

protections for trade secrets disclosed in connection with the statutory scheme’s goals, 

boundaries on the authority granted to regulate hazardous waste, and a later-added set of 

statutory guidelines for a healthy nail salon recognition program. 

Relevant to the issues in this appeal, the statutes contain one definition related to 

the core functions of the law. In this definition, “consumer product” is defined to mean 

“a product or part of the product that is used, bought, or leased for use by a person for 

any purposes.” (Health & Saf. Code, § 25251, subd. (e).) The definition then excludes 

any “dangerous drug or dangerous device” under section 4022 of the Business and 

Professions Code, “[d]ental restorative materials” under section 1648.20, subdivision (b) 

of the same code, any “device” as defined in section 4023 of the same code, any “food” 

as defined in section 109935, subdivision (a) of the Health and Safety Code, the 

packaging associated with several of these products, and any “pesticide” as defined under 

a certain federal law. (Health & Saf. Code, § 25251, subd. (e)(1)–(6).) 

As noted, the statutory scheme includes two core authorizations for further 

regulatory actions. The first requires the Department to adopt regulations “to establish a 

process to identify and prioritize those chemicals or chemical ingredients in consumer 

products that may be considered as being a chemical of concern.” (Health & Saf. Code, 
4.

§ 25252, subd. (a).) These regulations must “establish an identification and prioritization 

process that includes, but is not limited to,” three considerations: (1) the “volume of the 

chemical in commerce in this state”; (2) the “potential for exposure to the chemical in a 

consumer product”; and (3) the “[p]otential effects on sensitive subpopulations, including 

infants and children.” (Health & Saf. Code, § 25252, subd. (a)(1)–(3).) In developing 

the regulations, the Department must also “develop criteria by which chemicals and their 

alternatives may be evaluated,” including “traits, characteristics, and endpoints” as 

included in the clearinghouse aspects of the statutory scheme. (Health & Saf. Code, 

§ 25252, subd. (b)(1).)

The second authorization for regulatory action requires the Department to adopt 

regulations “that establish a process for evaluating chemicals of concern in consumer 

products, and their potential alternatives, to determine how best to limit exposure or to 

reduce the level of hazard posed by a chemical of concern.” (Health & Saf. Code, 

§ 25253, subd. (a)(1).) As part of these regulations, the Department must “establish a 

process that includes an evaluation of the availability of potential alternatives and 

potential hazards posed by those alternatives, as well as an evaluation of critical exposure 

pathways” and include life cycle assessment tools that consider at least 13 identified 

factors such as product function or performance, public health impacts, and economic 

impacts. (Health & Saf. Code, § 25253, subd. (a)(2).) Finally, the regulations developed 

in this area must “specify the range of regulatory responses that the [D]epartment may 

take following the completion of the alternatives analysis,” including “[n]ot requiring any 

action,” “[i]mposing requirements to provide additional information needed to assess” 

chemicals of concern and their alternatives, imposing labeling requirements or 

restrictions on use, “[p]rohibiting the use of the chemical of concern in the consumer 

product,” and requiring funding for “green chemistry challenge grants where no feasible 

safer alternative exists,” among others. (Health & Saf. Code, § 25253, subd. (b).)
5. 

To the extent the statutory scheme contains any indication of the overall goals of 

the new regulatory scheme, those are contained in the statute defining the role of the 

green ribbon science panel. There, the panel is authorized to advise on “matters in 

support of the goals of this article,” which are described as “significantly reducing 

adverse health and environmental impacts of chemicals used in commerce, as well as the 

overall costs of those impacts to the state’s society, by encouraging the redesign of 

consumer products, manufacturing processes, and approaches.” (Health & Saf. Code, 

§ 25255, subd. (a).) 

Finally, the statutory scheme includes limitations on the newly granted authority 

by noting the statutes may not limit any other agency’s “existing authority over 

hazardous materials” and that the statutes do “not authorize the [D]epartment to 

supersede the regulatory authority of any other department.” (Health & Saf. Code, 

§ 25257.1, subds. (a), (b).) Further, the statute prevents duplicating or adopting 

conflicting regulations “for product categories already regulated or subject to pending 

regulation consistent with the purposes of this article.” (Health & Saf. Code, § 25257.1, 

subd. (c).) 

Overview of the Safer Consumer Products Regulations 

The regulations ultimately adopted to implement the Green Chemistry law are 

called the Safer Consumer Products regulations. (See Cal. Code Regs., tit. 22, § 69501 et 

seq.)2 The regulations state they specify the “process for identifying and prioritizing 

Priority Products and their Chemicals of Concern, and identifying and analyzing 

alternatives to determine how best to eliminate or reduce potential exposures to, or the 

level of potential adverse impacts posed by, the Chemical(s) of Concern in Priority 

Products.” (Tit. 22, § 69501, subd. (a).) 

2 Further references to title 22 are to title 22 of the California Code of Regulations.
6. 

At a general level, and as applicable to this case, the regulations set forth a fourstep process for identifying and regulating priority products and their chemicals of 

concern.3 These steps are: (1) to identify candidate chemicals (see tit. 22, §§ 69502–

69502.3); (2) to identify and prioritize products containing candidate chemicals (see 

tit. 22, §§ 69503–69503.7); (3) to have responsible parties submit alternatives analysis 

reports for priority products (see tit. 22, §§ 69505.1–69505.9); and (4) to utilize those 

reports to identify and implement regulatory responses for priority products (see tit. 22, 

§§ 69506–69506.10). Although this case focuses primarily on issues relating to the 

second step, we provide a fuller summary of the regulations for context. 

Identifying Candidate Chemicals

Candidate chemicals are those chemicals that are considered to be “a candidate for 

designation as a Chemical of Concern” under the regulatory scheme. (Tit. 22, § 69501.1, 

subd. (a)(19).) The list of these chemicals is derived either through reference to lists 

created by other identified national and international bodies or through an independent 

evaluation by the Department that considers enumerated adverse impacts, particularly on 

sensitive subpopulations, and both potential and actual exposure to the chemical in 

question. (See tit. 22, § 69502.2.) 

As used throughout the regulations, “adverse impacts” are defined as “adverse 

public health impacts and/or adverse environmental impacts.” (Tit. 22, § 69501.1, 

subd. (a)(5).) Each of these two subcategories of adverse impacts are regulatorily defined 

to include additional subcategories, which themselves may include other definitions. For 

example, adverse environmental impacts include five enumerated impacts, including 

adverse air quality impacts. (Tit. 22, § 69501.1, subd. (a)(4)(A).) “Adverse air quality 

impacts” are defined to mean “indoor or outdoor air emissions of any of the air 

3 Both the terms “priority product” and “chemical of concern” are defined by the 

regulations. (See tit. 22, § 69501.1, subd. (a)(21), (53).) These definitions, and others relevant 

to the court’s analysis, will be noted or discussed as necessary when they arise.
7. 

contaminants listed below that have the potential to result in adverse public health, 

ecological, soil quality, or water quality impacts.” (Tit. 22, § 69501.1, subd. (a)(2).) The 

regulations then list seven categories of air contaminates, which reference other internal 

and external regulations and include additional identifications of eight greenhouse gases. 

(Tit. 22, § 69501.1, subd. (a)(2)(A)–(G).) 

“Adverse public health impacts” are defined to mean “any of the toxicological 

effects on public health specified in article 2 or article 3 of chapter 54, or exceedance of 

an enforceable California or federal regulatory standard relating to the protection of 

public health,” and public health “includes occupational health.” (Tit. 22, § 69501.1, 

subd. (a)(6).) Articles 2 and 3 of chapter 54 refer to the regulations defining hazard traits 

considered under the related statutory authority creating a toxic information 

clearinghouse. These traits include such things as a chemical’s carcinogenicity, 

developmental and reproductive toxicity, and dermatoxicity. (See tit. 22, § 69401 et seq.) 

Identifying Priority Products 

Once the list of candidate chemicals has been created, the regulations require the 

Department to “identify and prioritize products containing Candidate Chemicals.” 

(Tit. 22, § 69503.) Such products include any “products that contain one or more 

Candidate Chemicals and that are placed into the stream of commerce in California.” 

(Tit. 22, § 69503.1.) Those products of highest concern are deemed priority products and 

the list of such products is required to be established and updated through rulemaking 

under the APA. (Tit. 22, §§ 69503.2, 69503.5, subd. (a).) 

The process for prioritizing products and creating the priority products list is set 

out within the regulations and guided by two “Key Prioritization Principles”: (1) there 

“must be potential public and/or aquatic, avian, or terrestrial animal or plant organism 

exposure to the Candidate Chemical(s) in the product”; and (2) there “must be the 

potential for one or more exposures to contribute to or cause significant or widespread 

adverse impacts.” (Tit. 22, § 69503.2, subd. (a).) 
8.

The regulations explain that whether a product is determined to be a high priority 

turns on “an evaluation of the product-chemical combination to determine its associated 

potential adverse impacts, potential exposures, and potential adverse waste and end-oflife effects” using factors for which “information is reasonably available.” (Tit. 22,

§ 69503.2, subd. (b).) The types of adverse impacts and exposures considered are 

separately listed in title 22, section 69503.3. For adverse impacts, seven factors are 

enumerated, such as the chemical’s hazard traits, aggregate effects, cumulative effects 

with other chemicals, physicochemical properties, environmental fate, and potential to 

degrade, along with the populations which may be impacted by the chemical. (Tit. 22,

§ 69503.3, subd. (a)(1)(A)–(G).) For exposures, four factors are enumerated, with some 

having additional subparts. These are: (1) the product’s market presence, as identified 

through sales by volume and number of units, as well as intended product use and 

targeted customers; (2) the occurrence or potential occurrence of exposure to the 

chemical in the product; (3) the household and workplace presence of the product; and 

(4) potential exposures to the chemical in the product’s life cycle, including among other 

factors the “[f]requency, extent, level, and duration of potential exposure for each use 

scenario and end-of-life scenario.” (Tit. 22, § 69503.3, subd. (b).)

In addition to these factors, the regulations consider “the scope of other California 

State and federal laws ... under which the product or the Candidate Chemical(s) in the 

product is/are regulated and the extent to which these other regulatory requirements 

address, and provide adequate protections with respect to the same potential adverse 

impacts and potential exposure pathways, and adverse waste and end-of-life effects, that 

are under consideration as a basis for the product-chemical combination being listed as a 

Priority Product.” (Tit. 22, § 69503.2, subd. (b)(2).) Where a product is already 

regulated “with respect to the same potential adverse impacts and potential exposure 

pathways ..., the Department may list such a product-chemical combination as a Priority 

Product only if it determines that the listing would meaningfully enhance protection of 
9. 

public health and/or the environment with respect to the potential adverse impacts, 

exposure pathways, and/or adverse waste and end-of-life effects that are the basis for the 

listing.” (Ibid.) Finally, in its discretion, the regulations permit the Department to 

consider “whether there is a readily available safer alternative that is functionally 

acceptable, technically feasible, and economically feasible.” (Tit. 22, § 69503.2, 

subd. (b)(3).) 

Based on this analysis, a priority products list is created. For each proposed 

priority product, the Department must provide a “description of the product-chemical 

combination that is sufficient for a responsible entity to determine whether one or more 

of its products is a Priority Product” and identify the “Candidate Chemical(s) that is/are 

the basis for the product being listed as a Priority Product,” along with their hazard traits 

and environmental or toxicological endpoints. (Tit. 22, § 69503.5, subd. (b)(1)(A), 

(2)(A).) In addition, the Department must provide the “due date for submission of the 

[p]reliminary [alternatives analysis r]eport” required by the regulations. (Tit. 22, 

§ 69503.5, subd. (b)(3)(A).) 

Requiring Alternatives Analysis Reports 

Once a product-chemical combination is added to the priority products list, a 

series of regulatory requirements are imposed on responsible entity parties, with a 

“responsible entity” being defined as a manufacturer, importer, assembler, or retailer of 

the priority product. (Tit. 22, § 69501.1, subd. (a)(60).) The ultimate obligation is the 

submission of an alternatives analysis report for the priority product. (Tit. 22, § 69505.1, 

subd. (b).) However, the submission of this report may not be required if the 

manufacturer takes one of two types of action. 

First, the manufacturer may remove the chemical of concern from the stream of 

commerce. This can be done by providing one of three notices in a manner that complies 

with the regulations. These options are a “Chemical Removal Intent,” a “Product 

Removal Intent,” or a “Product-Chemical Replacement Intent” notice. (Tit. 22, 
10.

§ 69505.2, subd. (a)(1)(A).) Notably, if only a removal notice is provided, and a 

subsequent confirmation notice is not timely submitted, a preliminary alternatives 

analysis report, or similar report, must still be submitted. (Tit. 22, § 69505.2, 

subd. (a)(1)(B).)

Second, if the Department has decided to identify an alternatives analysis 

threshold, a manufacturer may submit an alternatives analysis threshold notification 

certifying its product does not exceed the alternatives analysis threshold set by the 

Department. (Tit. 22, § 69505.3, subd. (a)(1)–(4).) An “alternatives analysis threshold”

is a discretionarily set “concentration for any Chemical of Concern that is an intentionally 

added ingredient” to a priority product. (Tit. 22, § 69503.5, subd. (c).) The threshold is 

defined as either the “Practical Quantitation Limit for a Chemical of Concern that is 

present in a Priority Product solely as a contaminant” or the “applicable concentration, if 

any, specified by the Department.” (Tit. 22, § 69501.1, subd. (a)(12).) The “practical 

quantitation limit” for a chemical is itself defined as “the lowest concentration of a 

chemical that can be reliably measured within specified limits of precision and accuracy 

using routine laboratory operating procedures.” (Tit. 22, § 69501.1, subd. (a)(52).)

If neither of these conditions are met, a two-stage alternatives analysis report is 

required under the regulations. (See tit. 22, § 69505.4, subd. (a).) In the first stage, the 

responsible entity must (1) identify the product requirements and functions of the 

chemicals of concern, (2) identify alternatives, (3) identify factors relevant for a 

comparison of those alternatives, (4) provide an initial evaluation and screening of 

alternative replacement chemicals, (5) consider any additional pertinent information 

relevant to the goals of the alternatives analysis, and (6) submit a preliminary alternatives 

analysis report. (Tit. 22, § 69505.5, subds. (a)–(f).) Each of these individual steps are 

governed by regulations setting forth the manner and extent to which each must be 

conducted. (See ibid.) However, if in the process of conducting the first five steps a 

responsible entity “determines a functionally acceptable and technically feasible 
11.

alternative is not available,” they may, in compliance with additional regulatory 

requirements, submit “an [a]bridged [alternatives analysis r]eport in lieu of the 

[p]reliminary and [f]inal [alternatives analysis r]eports.” (See tit. 22, § 69505.4, 

subd. (b).)

An abridged alternatives analysis report, if acceptable, allows the responsible 

entity to complete the first five steps preceding the completion of a preliminary 

alternatives analysis report and the first step leading to a final alternatives analysis report 

in one initial report. (Tit. 22, § 69505.4, subd. (b)(1)–(2).) Recognizing that additional 

regulatory action will be taken, the responsible entity must also include “an 

implementation plan” for “proposed regulatory responses” (tit. 22, §§ 69505.4, 

subd. (b)(4)) including, at a minimum, providing information to consumers (tit. 22, 

69506.3) and either initiating “a research and development project” or funding “a 

challenge grant” that seeks to speed the implementation or use of a safer alternative to the 

Priority Project in one of four enumerated ways (tit. 22, § 69506.8).

Where an abridged alternatives analysis report is not proper, and once a 

preliminary alternatives analysis report is approved by the Department, a second, fivestep stage is required for analyzing any alternative chemicals still under consideration. 

(Tit. 22, § 69505.6.) In this stage, the responsible entity must again (1) identify factors 

relevant for comparing alternatives, (2) compare the priority product and alternatives,

(3) consider any other pertinent information, (4) “select the alternative(s) that will replace 

the Priority Product, unless the decision is to retain the existing Priority Product,” and 

(5) submit a final alternatives analysis report to the Department for approval. (Tit. 22,

§ 69505.6, subds. (a)–(e).) The content of both the preliminary and final alternatives 

analysis reports are subject to extensive additional regulations regarding the required 

scope and content of those reports. (Tit. 22, § 69505.7.)
12. 

Implementing Regulatory Responses 

Ultimately, the process moves toward implementation of a regulatory response 

regarding the priority product. Under the regulations, the Department “shall identify and 

require implementation of one or more regulatory responses for Priority Products and/or 

selected alternative products when the Department determines such regulatory responses 

are necessary to protect public health and/or the environment.” (Tit. 22, § 69506, 

subd. (a).) The Department is instructed to “give preference to regulatory responses 

providing the greatest level of inherent protection,” meaning, “avoidance or reduction of 

adverse impacts ... that is achieved through the redesign of a product or process, rather 

than through administrative or engineering controls designed to limit exposure to, or the 

release of, a Chemical of Concern or replacement Candidate Chemical in a product.” 

(Tit. 22, § 69506, subd. (b).) 

The regulations provide for several potential responses including providing 

information to consumers, imposing use restrictions on products, prohibiting sales, 

engineering safety measures or imposing administrative controls on accessing products, 

defining end-of-life management requirements, and requiring further research on 

potential alternatives. (Tit. 22, §§ 69506.3–69506.8.) Exemptions are permitted to the 

regulations, but only where the response conflicts with or duplicates other regulatory 

programs. (Tit. 22, § 69506.9, subd. (b)(6).) 

Resolving Disputes

Throughout the regulatory process, the Department provides opportunities for 

affected responsible entities to dispute decisions made by the Department. (Tit. 22, 

§ 69507.) Subject to some irrelevant exceptions, the regulations first require use of an 

informal dispute resolution procedure that must be started within 30 days of the decision 

subject to dispute and is expected to be resolved within 30 days of initiating the dispute. 

(Tit. 22, § 69507.1.) If informal dispute resolution fails, an affected responsible entity 

may then file an appeal to the director of the Department (the director). (Tit. 22, 
13.

§ 69507.2.) This appeal must be filed within 30 days of the resolution of the informal 

dispute procedure and should be resolved within 60 days of the appeal being filed. 

(Tit. 22, § 69507.2, subds. (b)–(c).)

FACTUAL AND PROCEDURAL BACKGROUND

As mentioned, this case revolves around the regulatory decision to list spray foam 

systems as a priority product. Spray foam systems were initially identified as a potential 

priority product in March 2014. As part of the process for finalizing spray foam systems 

as a priority product under the regulations, the Department drafted multiple documents 

over several years detailing findings relevant to the listing regulation. These documents 

are contained in the administrative record and provided support for the initial statement 

of reasons and final statement of reasons released by the Department as part of the 

standard regulatory process. With respect to issues discussed below, these documents 

include a 2017 “Summary of Technical Information and Scientific Conclusions for 

Designating Spray Polyurethane Foam Systems with Unreacted Methylene Diphenyl 

Diisocyanates as a Priority Product” (Technical Summary), a 2018 “Economic and Fiscal 

Impact Statement” (Economic Assessment), and a 2018 “California Environmental 

Quality Act Notice of Exemption” (Exemption Notice). We begin by summarizing these 

three documents.

The Technical Summary

The Department’s Technical Summary was drafted “to present the scientific 

information the Department ... relied on to identify and prioritize spray polyurethane 

foam ... systems containing unreacted methylene diphenyl diisocyanates (MDI) for 

listing as a Priority Product.” With relevant citations to scientific references, the first part 

of the Technical Summary, titled Executive Summary, explains that isocyanates are 

chemicals known to “elicit an immune response known as respiratory sensitization” 

which “can lead to an elicitation of asthma in subsequent exposures to isocyanates, even 

when exposures are very low.” “[I]t is generally accepted that isocyanates, including 
14.

MDI, are asthmagens ... and are associated with work-related asthma.” In data from 

1993 through 2008, the California Work-Related Asthma Prevention Program “recorded 

47 cases of work-related asthma associated with isocyanate exposure, with eight cases 

specifically attributed to MDI exposure.”

Inhalation of MDI “during and soon after application” of spray foam systems is 

identified as a “particular concern” based in part on the fact that “MDI-induced fatalities 

have been documented for workers using spray polyurethane paints ... and resins 

containing MDI.” Exposure “may occur with use of either high- or low-pressure [spray 

foam] systems, including home use kits.” While certain workers have been found to have 

exposures that exceed the threshold limit values set by the American Conference of 

Governmental Industrial Hygienists and/or the permissible exposure limits of the 

California Division of Occupational Safety and Health Administration, studies “also 

suggest[] that exposure to very low concentrations of MDI can trigger adverse reactions 

in previously sensitized individuals.” Although engineering controls, such as personal 

protective equipment (PPE), can be effective in reducing exposure, several factors make 

PPE use unreliable to the point that estimates suggest “only about 64 [percent] of 

construction workers wear proper PPE on a regular basis”

With respect to what are known as high-pressure spray foam systems, “industry 

recommended engineering and administrative controls and use of PPE reduces the 

likelihood of exposure, but cannot eliminate worker exposure to MDI during spraying.” 

Aerosolized exposure “in the workers’ breathing zone” exists throughout “the entire work 

shift,” and additional exposure may occur “through accidental spills or leaks, cleaning 

and maintenance of the equipment ... [or f]ailure to use ..., improper use of, imperfect fit 

or malfunction of PPE.”

Other types of systems, known as low-pressure systems, are “used by insulation 

contracting businesses, including those with employees ... and sole proprietors, and by 

individual consumers” and are “exempt from federal ... and [state] requirements.” There 
15.

is “[l]imited data” suggesting that such systems generate “less airborne MDI” but, “in 

several studies, measurable MDI was detected around applicators’ breathing zones during 

application.” Use of such systems is particularly concerning “because [users] are 

unlikely to use engineering controls and PPE or industry recommended administrative 

controls.”

Based on these findings, the Executive Summary explains that applying spray 

foam “through high- and low-pressure systems, including home use [spray foam] kits, has 

the potential to cause significant or widespread adverse impacts to human health” 

including “not only workers of highly specialized commercial operations” but also “any 

applicator who is either improperly protected or unprotected against MDI exposures such 

as sole proprietors and individual consumers in California.”

Following this part, the Technical Summary contains six more parts supporting the 

Executive Summary’s statements. The first four parts define the nature of the identified 

priority product and chemicals of concern, including those chemicals’ hazard traits and 

environmental impacts. The other two parts discuss the exposure potential to humans and 

impacts on sensitive populations.

Although the document discusses both high- and low-pressure spray foam 

systems, it explains that products of both types share a common feature in the fact that 

they utilize two separate containers, one holding pure MDI and the other holding 

materials to combine with the MDI, and mix the contents of those containers together in 

order to spray out a foam. Although identified generally as MDI, the chemicals of 

concern are “isocyanates that are referred to as 4,4’-MDI or pure MDI ..., generic MDI, 

and technical grade MDI, all of which contain 4,4’-MDI.” MDI is listed, classified, or 

identified by multiple national and international agencies that track potentially harmful 

chemicals.

MDI is “a respiratory sensitizer and generally considered as an asthmagen ... 

associated with work-related asthma .... Once sensitized, re-exposure to even low 
16.

concentrations of MDI ... may trigger severe asthma attacks in some people.” The 

Technical Summary reviews several studies relating to isocyanates generally, and MDI 

specifically, focusing on allergic sensitization and respiratory toxicity issues in humans 

and animals supporting this conclusion. The Technical Summary then discusses how 

MDI may exist in the environment, including its susceptibility to discharge in the air, 

water, and soil. In the discussion of air discharge, the Technical Summary notes that 

“airborne concentrations of MDI are expected to be negligible” once the spray foam has 

cured but that the product “can undergo thermal degradation and release toxic chemicals” 

even after that point.

With respect to the exposure potential to MDI in spray foam systems, the 

Technical Summary first summarizes the market presence of the proposed priority 

product, noting that the total market exceeds a billion dollars and is expanding, that there 

are at least 38 California contractors listed as members of the Spray Polyurethane Foam 

Alliance, that the estimated market in California is between $55 and $60 million, and that 

use of spray foam systems in California is increasing based on energy conservation 

incentives to the point that in one county, all newly constructed homes are being 

insulated entirely with spray foam systems.

The Technical Summary then discusses various exposure routes to MDI, including 

inhalation when a product is sprayed. In such circumstances, even “when MDI 

concentrations were maintained below [regulated limits], studies suggest[] that 

applicators should still use PPE to protect themselves from potentially harmful 

exposures.” Reviewing monitoring studies, the Technical Summary explains there have

“not been many monitoring studies conducted to measure airborne concentrations of MDI 

during” spray foam applications, although it reviews some known studies. Based on this, 

the Technical Summary focuses on known fatalities and occupational asthma data related 

to isocyanate exposure in other fields.
17.

When it comes to non-occupational exposure points, the Technical Summary notes

that “over 50 [spray foam] products containing MDI” are “readily available to 

consumers” and that 7.7 percent of the U.S. population suffer from asthma. However, the 

Technical Summary concedes there is limited data on non-occupational exposure. The 

report concludes that although there is little data, there is no dispute that isocyanates “are 

sensitizers and potent asthmagens” and “no evidence that exposure to MDI at nonoccupational settings [is] safe and do[es] not cause asthma.”

The Technical Summary next reviews sensitive subpopulations. The “population 

subgroups of greatest concern” are identified as “commercial operators using highand/or low-pressure [spray foam] systems employing only lower tiers of protection, 

unprotected workers in any commercial businesses, sole proprietors, and individual 

consumers who purchase [spray foam] systems for various do-it-yourself projects.” The 

summary notes that workers “may be susceptible to both acute and chronic exposure,” 

that isocyanates are “recognized as a cause of occupational asthma,” that training for 

some workers exists but there is little evidence that “applicators who are exempt from 

state and federal worker protection standards” receive that training, that regardless of 

training accidental spills, leaks, and cleaning, along with poor or no use of PPE may still 

result in exposure, that the general public may purchase products without any safety 

information or proper PPE, and that no current monitoring program exists for protecting 

workers from exposure to isocyanates. Any exposure was of particular concern because 

sensitized employees can “not reverse or cure the allergic sensitization that has already 

occurred.”

Based on all these findings, the Technical Summary “conclude[s] that workers, 

consumers, and bystanders could be exposed to MDI during the use of either highpressure or low-pressure [spray foam] systems that contain MDI” and that these 

“exposures have the potential to contribute to or cause significant or widespread adverse 

impacts on the health of a considerable number of people in the State of California.”
18.

The Economic Assessment

As part of the APA requirements for the proposed regulation listing spray foam 

systems as a priority product, the Department created the Economic Assessment

discussing the economic impacts of the proposed listing. Focusing on the requirement 

that spray foam system manufacturers would be required to submit reports following the 

listing, the Economic Assessment states there are “17 [spray foam] systems 

manufacturers located throughout the U.S. that could be impacted” by the regulation, 

with individual estimated costs of between $62,800 and $182,800 and total costs between 

$1,067,600 and $3,107,600.

The Department concluded, in part through surveys with the known 

manufacturers, that spray foam systems are “likely the first product that will result in 

manufacturers conducting [a]bridged [alternatives analysis]” reports. In its own research, 

the Department concluded such reports would cost between $48,000 and $78,000 to 

complete, but ultimately accepted industry estimates of $50,000 to $150,000. Notably, 

industry estimates for a full alternatives analysis report are between $120,000 and 

$250,000. The remaining cost estimates came from additional paperwork required by the 

regulations and Department review time.

The Department also looked at potential benefits and costs of the proposed 

regulation. For benefits, the Department noted that the primary goal of its regulatory 

process is “to protect public health” by evaluating ways to make spray foam systems 

safer for consumers and workers. The Department stated this goal could cause 

manufacturers to realize “financial benefits from increased product sales, reduced 

employee health and safety costs, and reduced workers’ compensation claims.” 

Employers, workers, and consumers could also benefit from “reduced medical costs, 

lower incidence of debilitation chronic conditions, and less need for [PPE] or specialized 

safety training.”
19.

The Department also felt that the expected use of abridged alternatives analysis 

reports would further benefit manufactures because “it allows the continued sale and use 

of the Priority Product on the condition” that manufacturers provide proper data, fund 

research projects, and take steps to protect consumers. The Department could not, 

however, fully identify potential benefits because the requirement that manufacturers 

identify proposed regulatory responses meant it could not “predetermine the actions that 

[spray foam] manufacturers would need to take, either individually or collectively, to 

improve consumer product information and advance green chemistry or green 

engineering principles.”

With respect to costs, in addition to the actual figures calculated, the Department 

looked at the number and types of businesses affected, the number of businesses created 

or eliminated, and the number of jobs created or eliminated. The Department concluded

the listing regulation would affect only the 17 known manufacturers of spray foam 

systems, two of which are known to be small businesses, and all of which are “likely to 

submit an [a]bridged [alternatives analysis r]eport.”

The Department concluded listing spray foam systems as a priority product “is 

unlikely to result in the elimination or creation of [spray foam] systems manufacturing 

businesses.” Given the usefulness of and demand for the product, the Department did

“not anticipate that manufacturers will remove or replace unreacted MDI nor will they 

remove their [spray foam] products from the California marketplace.” Further, because 

the Department’s survey indicates there are “currently no known functionally equivalent 

or technically feasible alternatives to the use of unreacted MDI,” the Department 

concluded businesses “could be created to assist manufacturers in meeting regulatory 

obligations by providing consulting services, as well as chemical and material science 

research and development support” while the manufacturers proceed through their 

regulatory obligations. Additional similar benefits to product safety specialists, 
20.

workplace trainers, and chemical researchers are also noted given the requirements 

imposed when an abridged alternatives analysis is undertaken.

With respect to jobs, the Department concluded the proposed regulatory 

requirements are “not likely to result in the creation or elimination of jobs in California,” 

given that manufacturers are mostly out of state. However, “statewide job expansion 

could occur in areas related to business consulting, product research and design, 

manufacturing and sales of PPE, product marketing, consumer education, worker safety 

training, and professional certification programs.”

The Economic Assessment also looks at the need for regulation and alternatives to 

the listing decision. On the need for regulation, the document states there are “no 

equivalent federal regulations that require product manufacturers to determine if the 

chemical in the product is necessary and if there is a safer alternative” and that 

California’s “worker protection standards do not apply to consumers or sole proprietors.” 

Accordingly, the “proposed regulation is an important supplement to current state and 

federal worker safety standards and the ongoing federal efforts to protect California 

workers by preventing worker and consumer injuries.”

With respect to alternatives, the Economic Assessment considers three potential 

alternatives. The first two alternatives would increase the scope of the priority product 

by also including products “containing toluene diisocyanate” or “one-component premixed cans” of spray foams containing MDI. These were rejected because the “TDIcontaining coatings are a separate product that serves a different function” and pre-mixed 

spray foams do not have much unreacted MDI and exposures are not well characterized 

and assumed to be low. The third alternative allowed spray foam systems “manufacturers 

to take voluntary actions to minimize potential worker and consumer exposures to 

unredacted MDI.” The Department rejected this option “because it does not advance the 

goals of the ... regulations in general and of this proposed regulation in specific.” The 

Department stated, “voluntary initiatives are not enforceable” and explained, “there 
21.

would be no assurance that the [spray foam] industry would vigorously pursue safer 

alternatives to the use of unreacted MDI in [spray foam] products” and that the 

Department “needs to be able to take effective actions to ensure that workplaces are safe 

and that all [spray foam] applicators, including sole proprietors and consumers, have 

access to health and safety information.” When discussing costs of this alternative, the 

Department noted it “did not quantify costs or benefits associated with [the third 

alternative] due to a lack of authority to implement this alternative.”

The Exemption Notice

In an apparent effort to comply with its CEQA obligations, the Department issued 

the Exemption Notice with respect to its decision to list spray foam systems as a priority 

product. Summarizing the regulatory structure of the Green Chemistry law, the 

Department noted that after a priority product is identified, “a responsible entity may 

choose to remove the [chemical of concern] from the Priority Product; stop selling or 

distributing the Priority Product in California; or perform an Alternatives Analysis.” The 

Department also explained that if the alternatives analysis route is chosen, the 

Department “may impose regulatory responses that are designed to prevent or 

significantly reduce the potential for adverse impacts to public health and the 

environment.”

Looking at its decision to list spray foam systems as a priority product, the 

Department concluded the listing was exempt from CEQA because the “project will not 

result in a change in any of the physical conditions within the area affected by the 

project.” Therefore, the Department found “with certainty that there is not a possibility 

that the activities in question will result in a significant environmental effect.”

The Administrative Challenge, Lawsuit, and Present Appeal

After public hearings and consideration of the documents above, the Department 

eventually elected to add spray foam systems as a priority product. In March 2018, the 
22. 

Department submitted the final regulatory package for the listing regulation to the Office 

of Administrative Law. The listing was approved on April 26, 2018. 

On May 30, 2018, ACC submitted an informal dispute resolution request to have 

the Department withdraw its listing of spray foam systems as a priority product. This 

request was denied on December 3, 2018. ACC then filed an appeal to the director, 

which was denied on February 25, 2019.

On August 9, 2019, appellants filed a petition for writ of mandate and complaint 

for declaratory and injunctive relief. An amended petition and complaint was filed on 

January 31, 2020, which became the basis for the underlying action. The amended 

petition and complaint contains one cause of action alleging a violation of statutory and 

regulatory authority, two causes of action under the APA, and one under CEQA. 

Ultimately, the trial court rejected the excess of authority and APA claims, but found a 

violation of CEQA. The present appeal and cross-appeal followed.

DISCUSSION 

In the context of the appeal and cross-appeal filed in this matter, we are asked to 

consider three distinct types of challenges to the Department listing spray foam systems 

as a priority product: (1) whether the Department’s listing determination exceeded its 

legal authority; (2) whether the Department failed to satisfy the requirements of the APA; 

and (3) whether the Department failed to comply with CEQA. The first two challenges 

were rejected by the trial court and are appealed by appellants. The third was accepted 

by the trial court and is appealed by the Department. Each challenge contains several 

related subarguments. We consider these three primary challenges in the order presented 

in the briefing. 

The Department Did Not Exceed Its Authority 

Appellants first contend the Department’s decision to list spray foam systems as a 

priority product is unlawful and should be set aside. Appellants raise multiple bases for 

this contention. First, appellants argue that the decision to list spray foam systems as a 
23.

priority product exceeded the Department’s authority because the Department failed to 

identify any threshold level of exposure to the underlying chemical of concern. Next, 

appellants argue the Department exceeded its authority through its definition of spray 

foam systems, claiming the definition improperly groups multiple distinct products 

together, covers nonconsumer products, and includes products subject to existing 

regulations.

The Department responds by asserting it was not obligated to establish an 

exposure threshold under the law and that it did not act arbitrarily or capriciously when 

determining spray foam systems qualify as a priority product. The Department further 

disputes that it could not list high- and low-pressure spray foam systems together, that it 

could not deem such systems consumer products, and that any existing regulations 

prevented its priority product determination.

Standard of Review

When evaluating the validity of a regulation, there are two questions that can drive 

the court’s analysis. The first asks “whether the regulation is ‘ “consistent and not in 

conflict with” ’ the provision that authorizes it,” and the second “whether the regulation 

is reasonably necessary to effectuate the purpose of the authorizing law.” (In re Gadlin 

(2020) 10 Cal.5th 915, 926.) Particularly when the regulation constitutes a quasilegislative rule, derived from lawmaking authority delegated to the agency, the scope of 

our review is narrow. (Western States Petroleum Assn. v. Board of Equalization (2013) 

57 Cal.4th 401, 415 (Western States).) “When a regulation is challenged on the ground 

that it is not ‘reasonably necessary to effectuate the purpose of the statute,’ our inquiry is 

confined to whether the rule is arbitrary, capricious, or without rational basis [citation] 

and whether substantial evidence supports the agency’s determination that the rule is 

reasonably necessary [citation].” (Ibid.) “[W]hen an implementing regulation is 

challenged on the ground that it is ‘in conflict with the statute’ [citation] or does not ‘lay 

within the lawmaking authority delegated by the Legislature’ [citation], the issue of 
24.

statutory construction is a question of law on which a court exercises independent 

judgment.” (Ibid.)

“We presume the validity of a regulation promulgated by a state agency. 

[Citation.] The burden lies with the party challenging the regulation to show its 

invalidity.” (In re Gadlin, supra, 10 Cal.5th at p. 926.) “ ‘ “Our function is to inquire 

into the legality of the regulations, not their wisdom.” ’ ” (Ibid.) “ ‘ “Administrative 

regulations that alter or amend the statute or enlarge or impair its scope are void and 

courts not only may, but it is their obligation to[,] strike down such regulations.” ’ ” 

(Ibid.)

The Department Is Not Obligated To Set Threshold Exposure Levels

Relying on the language of Health and Safety Code section 25252, 

subdivision (a)(2) and title 22, section 69503.2, subdivision (a)(1) and (2), appellants 

allege that the Department lacked authority to list spray foam systems as a priority 

product without expressly considering “any threshold level of what constitutes an 

exposure” to the underlying chemical of concern. According to appellants, one cannot 

demonstrate a “ ‘potential public ... exposure’ ” or a “ ‘potential for one or more 

exposure to contribute to or cause significant widespread adverse impacts’ ” without first 

determining what level of exposure causes harm. Appellants argue that failing to identify 

this figure and using it when determining the potential risks expands the Department’s 

authority beyond that authorized by the Green Chemistry law. Appellants further 

contend no evidence in the record shows that the exposure of workers or individual 

citizens using spray foam systems exceeds any level necessary to support a claim of 

potential public exposure or a potential for significant widespread adverse impacts, 

particularly when multiple settings for exposures are considered.

Appellants’ argument is not persuasive. As noted above, Health and Safety Code 

section 25252, subdivision (a) authorizes regulations “to establish a process to identify 

and prioritize those chemicals or chemical ingredients in consumer products that may be 
25.

considered as being a chemical of concern.” The three identified statutory factors to 

consider in this process are: (1) the “volume of the chemical in commerce in this state”; 

(2) the “potential for exposure to the chemical in a consumer product”; and (3) the 

“[p]otential effects on sensitive subpopulations, including infants and children.” (Health 

& Saf. Code, § 25252, subd. (a)(1)–(3).) From a plain language reading, then, the notion 

that a potential for exposure or a potential effect requires a set exposure level is 

unsustainable. While such a notion could be forcibly shoehorned into the concept of a 

potential for exposure, the same notion would be meaningless when identifying potential 

effects on sensitive subpopulations. (See Hassan v. Mercy American River Hospital 

(2003) 31 Cal.4th 709, 715–716 [“The words of the statute should be given their ordinary 

and usual meaning and should be construed in their statutory context. [Citations.] These 

canons generally preclude judicial construction that renders part of the statute 

‘meaningless or inoperative.’ [Citation.] In addition, words should be given the same 

meaning throughout a code unless the Legislature has indicated otherwise.”]; Knapp v. 

Ginsberg (2021) 67 Cal.App.5th 504, 533 [“ ‘We must construe identical words in 

different parts of the same act or in different statutes relating to the same subject matter 

as having the same meaning.’ ”].) Rather, the statutory use of “potential” makes sense 

only if it relates to the possibility of something happening, regardless of the extent.

The regulatory structure adopted for prioritizing products utilizes the term 

“potential” in the same manner as the statute. Paralleling the statutory language, the two 

“Key Prioritization Principles” set out in the regulations look at whether there is a 

“potential public ... exposure to the Candidate Chemical(s) in the product” and whether

there is the “potential for one or more exposures to contribute to or cause significant or 

widespread adverse impacts.” (Tit. 22, § 69503.2, subd. (a)(1)–(2).) In other regulations, 

such as those focusing on identifying exposures, the regulations again track the general 

statutory guidance and utilize the term potential in ways that most naturally reads as 

relating to a possibility. For example, when considering the “occurrence, or potential 
26.

occurrence, of exposures to” chemicals as an exposure factor. (Tit. 22, § 69503.3, 

subd. (b)(2).) This is further confirmed by the fact the regulations consider the 

“[f]requency, extent, level, and duration of potential exposure” for each use of the 

product as a separate factor. (Tit. 22, § 69503.3, subd. (b)(4)(F).) The language used 

separates the notion of extent or level of exposure from the possibility of potential 

exposure directly.

Upon review of the statutes and regulations, we see nothing in their language or 

structure that requires the Department “to identify any threshold level of what constitutes 

an exposure” in order to prioritize a product. Contrary to appellants’ argument, this does 

not render the notion of “exposure” meaningless. As noted, the overall process is one of 

prioritization. Thus, minimal exposure levels or low possibilities for actual exposure in 

use are always relevant when comparing one product to another. But neither factor is 

necessary in order to determine a product qualifies for priority status under the multitude 

of factors considered.

Notably, appellants do not argue an abuse of discretion or excess of authority in 

ranking spray foam systems above some known chemical/product combination because 

the failure to consider a threshold exposure level made an objective difference in the 

prioritization process. Instead, appellants contend that without a set threshold for 

exposure level, the Department could not prioritize products at all. The multitude of 

factors considered by the Department, both based on the statute and implementing 

regulations, and the specific language used in both, demonstrates no such threshold 

exposure level is necessary for prioritization.

Further, even if some threshold exposure requirement was necessary, the record 

contains evidence supporting a conclusion that even miniscule exposure to MDI could 

cause meaningful harm to previously sensitized individuals. Although we agree with 

appellants that the record does not definitively show a substantial number of known 

injuries related to MDI exposure through the use of spray foam systems, we do not agree 
27.

this demonstrates the Department’s regulation was not reasonably necessary or otherwise 

flawed. Rather, as reflected above, the record is filled with evidence demonstrating the 

harmfulness of exposure to MDI. This evidence includes studies showing exposure 

causes severe asthma and the potential for death, the fact that MDI exposure may occur 

through multiple known routes attributed to use of spray foam systems, and the fact that 

even minimal exposure can be severely detrimental to sensitized populations. As the 

purpose of the statutory scheme is to identify chemicals contained in consumer products 

based in part on a potential for exposure and potential effects on sensitive subpopulations, 

this is substantial evidence showing the Department’s determination MDI exposure 

through spray foam systems could be prioritized had a rational basis and was neither 

arbitrary nor capricious. (Western States, supra, 57 Cal.4th at p. 415 [“[w]hen a 

regulation is challenged on the ground that it is not ‘reasonably necessary to effectuate 

the purpose of the statute,’ our inquiry is confined to whether the rule is arbitrary, 

capricious, or without rational basis [citation] and whether substantial evidence supports 

the agency’s determination that the rule is reasonably necessary”].)

The Department Did Not Improperly Define Spray Foam Systems

Appellants also argue the Department exceeded its authority in defining spray 

foam systems by (1) combining together distinct product categories of products,

(2) failing to capture only “consumer products” in the definition of a spray foam system,

and (3) including products already subject to regulation within the same definition.

Concerning the claim the Department improperly combined together distinct 

product categories when defining spray foam systems, appellants compare and contrast 

high-pressure and low-pressure spray foam systems, highlighting the fact that the 

Department was aware of these differences, before arguing that combining the two 

systems within one definition resulted in the Department expanding “the scope of its 

regulatory authority by ignoring critical differences in the products’ potential exposure 
28.

and widespread and significant adverse impacts.”4 Appellants’ arguments, however, fail 

to identify any statutory or legal basis for limiting the Department’s authority to a single 

uniform product category. Rather, as noted above, the statutory scheme reads as much 

more focused upon the underlying chemicals of concern as opposed to the products in 

which they are contained. Upon review of the statutory language, we find nothing that 

would limit the Department’s authority to include more than one product category within 

its prioritization process for a chemical of concern. Indeed, when the Department does 

impose regulations upon a chemical of concern, Health and Safety Code section 25257.1, 

subdivision (c) expressly states that the Department “shall not duplicate or adopt 

conflicting regulations for product categories already regulated ... consistent with the 

purposes of this article.” (Italics added.) This strongly supports the notion that the 

Department’s statutory authority permits it to include multiple product categories within 

a single prioritization action if they share a chemical of concern.

The regulatory structure does not contradict this conclusion. The regulations focus 

on product-chemical combinations. To be prioritized, the regulations require a potential 

public exposure and the potential for one or more exposures to contribute to or cause 

significant or widespread adverse impacts. (Tit. 22, § 69503.2, subd. (a).) While many 

regulations focus on impacts and exposures in a product’s life cycle, no regulation or 

definition prevents multiple product categories from being grouped into a single product 

definition. Even the regulatory definition for a priority product seeks only to define a 

4 Appellants focus on whether the Department exceeded its authority by combining two 

different product types into one definition. Appellants do not raise any issues concerning 

whether the Department could prioritize products instead of chemicals under the statutory 

authorization for further regulations. (See Health & Saf. Code, §§ 25252, subd. (a)(1) 

[authorizing regulations “to establish a process to identify and prioritize those chemicals or 

chemical ingredients in consumer products that may be considered as being a chemical of 

concern” including factors such as “the volume of the chemical” in the state], 25253, subd. (a)(1) 

[authorizing regulations “that establish a process for evaluating chemicals of concern in 

consumer products”].) Our opinion here takes no position on that potential argument.
29.

product-chemical combination specific enough “for a responsible entity to determine 

whether one or more of its products” meets the definition. (Tit. 22, § 69503.5, 

subd. (b)(1)(A), italics added.) Likewise, if the product-chemical combination is a 

component used within multiple products, the Department is required to identify those 

products if known. (Tit. 22, § 69503.5, subd. (b)(1)(B).) Nothing in the regulatory 

scheme would prevent the Department from broadly defining a product-chemical 

combination provided it then prioritized that combination based on the known facts for 

products contained within that definition according to the regulatory factors.

Upon review, then, the court finds the Department did not exceed its statutory or 

regulatory authority when it defined spray foam systems to include both high-pressure 

and low-pressure systems. The underlying chemical of concern is the same in both 

systems, and the systems share at least one similarity in that the definition requires the 

combination of two canisters of products, one containing the chemical of concern. 

Further, as noted above, the record contains at least some evidence regarding exposure 

for both systems and indicates that even minimal exposure can be problematic for 

previously sensitized groups. The Department thus had a properly developed definition 

and adequate evidence to engage in its prioritization process for the definition chosen.

Appellants next contend the definition of spray foam systems is improper because 

it includes products that are not “consumer products” as required by the statutory and 

regulatory scheme. More specifically, appellants point out that high-pressure foam 

systems are used exclusively by professional workers in commercial settings who are 

specifically trained in their use. Appellants’ position, however, runs contrary to one of 

the few statutory definitions provided by the Legislature. The statutory definition of 

consumer product covers “a product or part of the product that is used, brought, or leased 

for use by a person for any purposes” and specifically excludes at least one product that 

would be used by professionals and not consumers in the colloquial sense, dental 

restorative materials. (Health & Saf. Code, § 25251, subd. (e).) A plain reading of the 
30.

definition shows the Department did not exceed its authority in selecting a definition that 

included high-pressure spray foam systems. Regardless of their use in commercial 

settings, such products are used by persons for a purpose and, unlike dental restorative 

materials, are not excluded from the definition of consumer products selected by the 

Legislature. Moreover, the Legislature’s specific choice of broad language and the lack 

of any conflict between the definition and the regulatory scheme enacted differentiates 

this case from those cited by appellants, such as Styrene Information & Research Center 

v. Office of Environmental Health Hazard Assessment (2012) 210 Cal.App.4th 1082, 

1096–1098, where a literal reading of the statute would be inconsistent with voter intent, 

and Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 757, where the contested products 

could not be used in a manner that fit within the construct of the overall statutory scheme. 

There is nothing in the statutory definition, statutory scheme, or regulatory scheme that 

would warrant deviating from the literal language utilized by the Legislature.

Appellants’ third argument is that the Department exceeded its authority by 

adopting a definition that included products already regulated by existing workplace 

regulations. Again, the focus is upon high-pressure spray foam systems, which are 

already regulated by the federal government’s Occupational Safety and Health 

Administration and California’s parallel agency. Here, appellants claim that the 

Department’s justification for listing spray foam systems as a priority product, thus 

triggering regulatory response requirements, is insufficient and therefore the listing 

exceeds the Department’s authority as defined by title 22, sections 69501, 

subdivision (b)(3)(A) and 69503.2, subdivision (b)(2).

Title 22, section 69501, subdivision (b)(3)(A)(1)–(2) states the overall regulations 

do not apply to already regulated consumer products provided those existing regulations 

“[a]ddress the same potential adverse impacts, [and] potential exposure pathways ... that 

could otherwise be the basis for the product being listed as a Priority Product” and 

“[p]rovide a level of public health and environmental protection that is equivalent to or 
31.

greater than the protection that would potentially be provided if the product were listed as 

a Priority Product.” Title 22, section 69503.2, subdivision (b)(2) requires the Department 

to consider other regulations in existence to determine “the extent to which these other 

regulatory requirements address, and provide adequate protections with respect to the 

same potential adverse impacts and potential exposure pathways ... that are under 

consideration as a basis for the product-chemical combination being listed as a Priority 

Product.” We review an agency’s action in this context to “ ‘determine whether the 

agency’s action was arbitrary, capricious, or without evidentiary support, and/or whether 

it failed to conform to the law.’ ” (California Assn. of Medical Products Suppliers v. 

Maxwell-Jolly (2011) 199 Cal.App.4th 286, 302–303 (Maxwell-Jolly).)

The record shows the Department recognized the existence of workplace 

regulations relating to MDI exposure. For example, it explained that both federal and 

state authorities had “established Permissible Exposure Limits for MDI that employers 

must observe,” which were “typically achieved through training and the use of PPE.” 

However, the Department determined these regulatory efforts were “the least desirable

because the original hazard ... is still present in the workplace” and did “not apply to 

consumers or sole proprietors.” The Department stated its listing of spray foam systems 

would work as “an important supplement” to the current standards, which it had 

concluded were not equivalent to the regulatory scheme enacted through the Green 

Chemistry law. Further, in response to a comment about duplicating existing laws, the 

Department stated it “disagrees that current laws applicable to [spray foam systems] 

provide adequate protection,” and pointing to its discussion of “Exposure and PPE,” 

stated, “Eliminating the chemical hazard entirely, or substituting a less hazardous 

chemical, is the most effective means of minimizing potential occupational chemical 

exposures.”

As appellants point out, preexisting regulations set exposure limits for MDI at 

ranges around and including 20 parts per billion. Yet, in its technical discussions, the 
32. 

Department pointed to evidence that sensitive subpopulations can be harmed by very low 

exposures, including those below the various exposure limits set by state and federal 

regulations. Further, the Department noted that exposures are not limited to inhalation 

protected by current regulations, but includes dermal routes, particularly in previously 

sensitized populations. This evidence supports the Department’s conclusion that current 

regulations fail to provide adequate protection for individuals exposed to MDI. Even if 

we assume existing regulations perfectly prevent workplace injuries due to overexposure 

through inhalation, a point also contested by the evidence cited by the Department, the 

regulations are not designed to protect against known exposure risks to sensitive 

subpopulations or exposures through dermal contacts. The difference in exposure 

pathways, known risks, and existing protection shows the Department’s position does not 

render title 22, “section 69501[, subdivision ](b)(3)(A) meaningless surplusage,” as 

argued by appellants. Rather, these differences highlight the Department’s determination 

that the chemical of concern in this case is not adequately regulated to cover the known 

exposure pathways and risks it presents in the community. Listing spray foam systems as 

a priority product, then, does not run afoul of the regulations prohibiting the Department 

from superseding existing regulatory authority because the existing regulations do not 

provide an equivalent protection to public health.5

The Department Satisfied the APA 

Appellants raise three arguments why the Department’s efforts to comply with the 

APA were inadequate. With respect to the requirement that the Department conduct an 

economic analysis, appellants argue the Department engaged in a mismatched analysis 

5 We take no position, however, on whether future regulatory action taken against spray 

foam systems subject to current workplace regulations as contemplated by Health and Safety 

Code section 25253, subdivision (b) would be valid under Health and Safety Code 

section 25257.1, subdivision (c)’s restriction on adopting conflicting regulations for product 

categories already regulated should they result in additional burdens on the use of such products 

in workplace settings.
33.

when considering the costs and benefits of the proposed regulation. With respect to the 

requirement that the Department conduct an alternatives analysis to the regulatory listing, 

appellants argue both that the Department failed to identify and fully assess reasonable 

alternatives and that the Department misunderstood its authority to impose an enforceable 

consent agreement.

Standard of Review and Applicable Law

“[T]he APA establishes basic minimal procedural requirements for rulemaking in 

California. [Citation.] ‘Pursuant to those procedural requirements, agencies must, 

among other things, (1) give the public notice of the proposed regulatory action; (2) issue 

a complete text of the proposed regulation with a statement of reasons for it; (3) give 

interested parties an opportunity to comment on the proposed regulation; (4) respond in 

writing to public comments; and (5) maintain a file as the record for the rulemaking

proceeding.’ ” (John R. Lawson Rock & Oil, Inc. v. State Air Resources Bd. (2018) 

20 Cal.App.5th 77, 111.)

With respect to the obligation to provide a statement of reasons for the regulation, 

an agency is required to conduct both an economic impact assessment and a reasonable 

alternatives analysis. The economic impact assessment must be submitted with the initial 

statement of reasons as part of the required notice of proposed action. (Gov. Code, 

§ 11346.2, subd. (b).) The reasonable alternatives analysis must be submitted with the 

final statement of reasons. (Gov. Code, § 11346.9, subd. (a)(4).)

Looking first at the economic impact assessment, a “state agency proposing to 

adopt, amend, or repeal any administrative regulation shall assess the potential for 

adverse economic impact on California business enterprises and individuals, avoiding the 

imposition of unnecessary or unreasonable regulations or reporting, recordkeeping, or 

compliance requirements.” (Gov. Code, § 11346.3, subd. (a).) In addition, for 

regulations such as the one contested here, the agency must assess “whether and to what 

extent [the regulation] will affect the following”: (1) “[t]he creation or elimination of 
34.

jobs within the state”; (2) “[t]he creation of new businesses or the elimination of existing 

businesses within the state”; (3) “[t]he expansion of businesses currently doing business 

within the state”; and (4) “[t]he benefits of the regulation to the health and welfare of 

California residents, worker safety, and the state’s environment.” (Gov. Code, § 11346.3, 

subd. (b)(1)(A)–(D).) The analysis is “intended to provide agencies and the public with 

tools to determine whether the regulatory proposal is an efficient and effective means of 

implementing the policy decisions enacted in statute or by other provisions of law in the 

least burdensome manner.” (Gov. Code, § 11346.3, subd. (e).)

The economic impact assessment can essentially result in one of two findings—

the action may have a significant impact, or the action will not have a significant impact. 

If the agency “makes an initial determination that the action may have a significant, 

statewide adverse economic impact directly affecting business,” it must include 

information regarding the types of businesses affected, a description of compliance 

requirements resulting from the action, and a statement seeking submission of 

alternatives “in the notice of proposed action.” (Gov. Code, § 11346.5, subd. (a)(7).) If 

the agency “makes an initial determination that the action will not have a significant, 

statewide adverse economic impact directly affecting business, including the ability of 

California businesses to compete with businesses in other states, it shall make a 

declaration to that effect in the notice of proposed action. In making this declaration, the 

agency shall provide in the record facts, evidence, documents, testimony, or other 

evidence upon which the agency relies to support its initial determination.” (Gov. Code, 

§ 11346.5, subd. (a)(8).) Regardless of which finding is made, the statute requires a 

“description of all cost impacts, known to the agency at the time the notice of proposed 

action is submitted to the office, that a representative private person or business would 

necessarily incur in reasonable compliance with the proposed action.” (Gov. Code, 

§ 11346.5, subd. (a)(9).) Notably, though, these requirements “shall not be construed in 

any manner that results in the invalidation of a regulation because of the alleged 
35.

inadequacy of the notice content or the summary or cost estimates, or the alleged 

inadequacy or inaccuracy of the housing cost estimates, if there has been substantial 

compliance with those requirements.” (Gov. Code, § 11346.5, subd. (c).)

The Legislature has explained that the economic impact assessment is not meant to 

“impose additional criteria on agencies, above that which exists in current law, in 

assessing adverse economic impact on California business enterprises, but only to assure 

that the assessment is made early in the process.” (Maxwell-Jolly, supra, 

199 Cal.App.4th at p. 307.) “The qualifying adjective ‘initial’ indicates the agency’s 

determination need not be conclusive, and the qualifying adjective ‘significant’ indicates 

that the agency need not assess or declare all adverse economic impact[s] anticipated.” 

(Ibid.) Notably, “a regulation is not necessarily invalid, even if it has a significant 

adverse economic impact on business” as “regulations may have negative economic 

impacts if necessary or reasonable under the circumstances.” (Id. at p. 306.)

Turning to the reasonable alternatives analysis, after all relevant periods of public 

comment, the agency seeking to create a new regulation must submit a final statement of 

reasons that includes the reasonable alternatives analysis contested in this case. The 

agency must submit a “determination with supporting information that no alternative 

considered by the agency would be more effective in carrying out the purpose for which 

the regulation is proposed, would be as effective and less burdensome to affected private 

persons than the adopted regulation, or would be more cost effective to affected private 

persons and equally effective in implementing the statutory policy or other provision of 

law.” (Gov. Code, § 11346.9, subd. (a)(4).) Relatedly, the agency must submit an 

“explanation setting forth the reasons for rejecting any proposed alternatives that would 

lessen the adverse economic impact on small businesses.” (Gov. Code, § 11346.9, 

subd. (a)(5).)

A regulation may be overturned based on a failure to properly complete either of 

these requirements. However, the bases for overturning a regulation are limited. Under 
36.

the statutory scheme, a “regulation or order of repeal may be declared to be invalid for a 

substantial failure to comply” with the APA. (Gov. Code, § 11350, subd. (a); see 

Maxwell-Jolly, supra, 199 Cal.App.4th at p. 303 [“The regulation ‘may’ be declared to be 

invalid by a court because of a ‘ “substantial failure” to comply with’ the APA.”].) “In 

addition to any other ground that may exist, a regulation or order of repeal may be 

declared invalid if either” the agency’s determination that a regulation is reasonably 

necessary to support the purpose of a statute “is not supported by substantial evidence” or 

the “agency declaration pursuant to paragraph (8) of subdivision (a) of [Government 

Code s]ection 11346.5 is in conflict with substantial evidence in the record.” (Gov. 

Code, § 11350, subd. (b)(1)–(2); see Maxwell-Jolly, at p. 304 [summarizing same].)

The language referencing a substantial failure to comply is understood as requiring 

“substantial compliance” with the substance essential to the reasonable objectives of the 

statutory scheme. (See Maxwell-Jolly, supra, 199 Cal.App.4th at p. 307.) “ ‘ “ ‘Where 

there is compliance as to all matters of substance[,] technical deviations are not to be 

given the stature of noncompliance.... Substance prevails over form.’ ” ’ ” (Ibid.; see 

Sims v. Department of Corrections & Rehabilitation (2013) 216 Cal.App.4th 1059, 1073 

[“noncompliance is insubstantial, or ‘harmless,’ only where it does not compromise any 

‘reasonable objective’ of the APA”].)

“ ‘ “Substantial evidence” is evidence of ponderable legal significance, evidence 

that is reasonable, credible and of solid value. [Citation.] “Substantial evidence ... is not 

synonymous with ‘any’ evidence.” Instead it is “ ‘ “substantial” proof of the essentials 

which the law requires’ ” [Citations.] The focus is on the quality, rather than the 

quantity, of the evidence.’ ” (Maxwell-Jolly, supra, 199 Cal.App.4th at p. 308.)

Appellants’ APA arguments were raised under two claims brought for declaratory 

relief under Code of Civil Procedure section 1060 and Government Code section 11350. 

The standards for resolving the validity of regulations subject to the APA, however, are 

regularly considered under the principles applicable to a writ of mandate. (See Maxwell-
37.

Jolly, supra, 199 Cal.App.4th at pp. 302–303 [“a trial court’s role generally is to 

‘determine whether the agency’s action was arbitrary, capricious, or without evidentiary 

support, and/or whether it failed to conform to the law’ ”]; Western States, supra,

57 Cal.4th at p. 429 [adopting Maxwell-Jolly’s analysis after summary judgment granted 

on regulatory validity].) Under this framework, this court “ ‘ “ ‘may make its own 

determination when the case involves resolution of questions of law where the facts are 

undisputed’ ” ’ ” and utilizes the same standard as the trial court when reviewing for 

substantial evidence. (Maxwell-Jolly, at p. 303.) The trial court cited to these same 

standards in its order but did not indicate whether it was treating the claim as one for 

summary judgment on a declaratory relief claim or resolution of the same issues through 

writ of mandate. Regardless, neither party in this case disputes the standard of review on 

these issues nor raises procedural issues with the trial court’s order, and both argue in the 

context of the Maxwell-Jolly analysis. We, too, apply that standard.

The Economic Impact Assessment Was Adequate

Appellants argue that the Department’s economic impact assessment was 

inadequate because of a mismatch between the identified benefits of the listing decision 

and the identified costs of that same decision. More specifically, appellants claim that the 

Department identified benefits from the listing decision that would only arise after 

additional regulatory actions were taken—such as expanded business interests arising 

from researching alternative chemical options and future health benefits from reducing 

future exposures—while failing to account for any costs arising in the same timeframe—

such as research, development, and consulting fees and allegedly increased consumer 

costs from reduced heating efficiency. This mismatch allegedly resulted in an incomplete 

costs analysis and an economic determination that conflicts with substantial evidence in 

the record.

The Department contests this argument in four ways. First, the Department 

generally asserts that its analysis complied in all respects with the APA’s requirements, 
38.

particularly focusing on the fact the regulatory action analyzed was that of listing foam 

spray systems as priority products. Second, the Department notes that even if it did note 

some irrelevant costs, the APA only requires it to consider significant known impacts, 

which the Department claims it did. Third, the Department states that while its analysis 

was complete and correct in terms of the factors it considered, it was unable to and 

therefore did not quantify the contested benefits, meaning any alleged imbalance did not 

occur. Fourth, the Department notes that its finding that there may be a significant 

financial impact means both that its analysis is not subject to the same statutory and legal 

scrutiny argued by appellants and that its conclusion was properly supported by the 

record.

We note at the outset that this court’s review of a finding regarding the potential 

for a significant economic impact asks whether the Department made “an initial showing 

that there was some factual basis for [its] decision” that substantially complied with the 

statutory scheme and is supported by substantial evidence in the record. (Western States, 

supra, 57 Cal.4th at p. 429.)

Under this standard, even if we assume the Department utilized an unbalanced 

comparison of costs and benefits, appellants’ argument that the Department’s 

determination warrants invalidating the regulation listing spray foam systems as a priority 

product still fails. This is so because the Department’s process substantially complied 

with the requirements of the APA and because appellants’ arguments for error fail to

show how the alleged error would impact the Department’s finding.

As noted above, the APA requires the Department to engage in a multi-step 

process to determine whether the proposed regulation may or will not have a significant 

economic impact. As part of this process, the Department is tasked with making an 

initial determination, releasing that determination publicly for comment, and then 

updating the initial determination to reflect either changes based on or rejections of the 

comments received. (Western States, supra, 57 Cal.4th at pp. 425–426.) The initial 
39.

determination need not be conclusive or all encompassing. But it must be more than 

mere speculative belief and must include a description of all cost impacts to a 

representative person or business that are known at the time and would be necessarily 

incurred. (Id. at pp. 427–428.)

Here, the Department followed this procedure. It gathered information on 

expected costs through surveys and other fact gathering and publicly disclosed its 

determination that the proposed regulation may have a significant economic impact in the 

form of costs associated with the regulatory response deemed most likely to occur based 

on the surveys. In response, the Department received public feedback, including from 

appellants, that suggested it had not properly considered all of the future costs associated 

with the regulatory decision. The Department responded to those comments, asserting 

that it had only included costs associated with the immediate regulatory response 

expected, based on industry feedback.

As to procedure and statutory expectations, the process used by the Department in 

this case substantially complied with the requirements of the APA. In determining there 

may be a significant economic impact from the regulation proposed, the Department was 

required to describe, among other factors, any “compliance requirements” resulting from 

the action and “all cost impacts, known to the agency at the time the notice of proposed 

action is submitted to the office, that a representative private person or business would 

necessarily incur in reasonable compliance with the proposed action.” (Gov. Code, 

§ 11346.5, subd. (a)(7)(B), (9).) These figures assist with the future determination 

whether any reasonable alternative exists to the proposed regulation. The Department 

was able to quantify the expected costs associated with the expected response under the 

regulation and was able to, and did, provide substantial evidence regarding the basis for 

these determinations. As such, parties reviewing the record would understand the 

perceived costs and have sufficient guidance to suggest potential alternatives if such 
40.

alternatives existed. We conclude, in the context of a finding there may be a substantial 

economic impact, that the Department’s actions substantially complied with the APA.

Appellants relatedly argue, under the premise the Department failed to consider all 

relevant costs, that the Department utilized a mismatched economic impact assessment 

through consideration of long-term benefits of the underlying law but only immediate 

costs. Even assuming the Department had an obligation to consider costs associated with 

potential future regulatory responses, as argued by appellants, the failure to do so in this 

particular case would not demonstrate a failure to substantially comply with the 

requirements of the APA or a lack of substantial evidence supporting the Department’s 

determination.6

As noted, the purpose of the APA is to provide an early indication of the costs and 

effects of a proposed regulation in order to determine whether the proposal will adversely 

affect business and thus to provide an opportunity to properly consider less economically 

impactful but equally effective alternatives. As the Department’s finding that there may 

be a significant economic impact from the regulation was supported by substantial 

evidence, appellants’ argument that additional evidence of increased costs must be 

considered before the regulation can be upheld is misplaced. The purpose of the statute 

was met the moment substantial evidence supported the Department’s determination that 

there may be a significant impact. Unlike cases where the Department contends no 

impact will occur, the actions required to satisfy the APA do not meaningfully change 

once the evidence reaches a critical mass and triggers the conclusion there may be a 

significant financial impact. Rather, at that point, the focus turns to the alternatives 

available and whether there is a reasoned basis to reject any reasonable alternatives 

6 As best as this court can discern, the statutory underpinning of appellants’ argument is 

the requirement the Department consider all cost impacts to a representative person or business 

that are known at the time and would be necessarily incurred. It is not evident, however, how 

costs associated with one of multiple potential future regulatory actions could be known at the 

time and necessarily incurred.
41.

identified. Appellants’ claim there was no substantial compliance with the APA because 

the Department did not identify enough of a substantial economic impact thus fails. We 

therefore turn to whether the alternatives analysis conducted by the Department was 

proper given the supportable finding there may be a significant economic impact from the 

decision to list spray foam systems as a priority product.

The Reasonable Alternatives Analysis Was Adequate

With respect to the alternatives analysis conducted by the Department, appellants 

argue the Department “failed properly and fully to consider an [enforceable consent 

agreement] as an adequate alternative to the listing decision.” Appellants contend the 

Department failed to consider the alternative of a consent agreement or permit public 

comment on the idea because it incorrectly determined it lacked the authority to enter into 

such an agreement as an alternative to the listing decision. The Department responds 

with the position that it acted appropriately because it determined the proposed 

alternative was not reasonable, therefore relieving the Department from considering it 

under the statutory scheme, and further that it lacked authority to impose a consent 

agreement in lieu of a regulatory listing

Government Code section 11346.2, subdivision (a)(4)(A) requires a “description 

of reasonable alternatives to the regulation and the agency’s reasons for rejecting those 

alternatives” as part of the initial statement of reasons. The argument raised by 

appellants in this case, however, focuses on whether the Department satisfied 

section 11346.9, which does not specifically mention “reasonable alternatives.” Despite 

this lack of symmetry in language, both parties’ arguments proceed on the assumption 

that alternatives must be reasonable to be considered. Accordingly, we accept the 

premise that only reasonable alternatives must be considered for the purposes of the 

issues raised.

Accepting this premise, we agree with the Department’s argument that an 

enforceable consent decree is not a reasonable alternative and find that its rejection of 
42.

that option is supported by substantial evidence. Under Government Code

section 11346.2, subdivision (b)(4)(A), “[r]easonable alternatives ... include, but are not 

limited to, alternatives that are proposed as less burdensome and equally effective in 

achieving the purposes of the regulation in a manner that ensures full compliance with the 

authorizing statute or other law being implemented or made specific by the proposed 

regulation.” In this case, the Department rejected the idea of utilizing voluntary industry 

programs in place of listing spray foam systems as a priority product both prior to and 

throughout the regulatory proceedings.

The Department’s reasoning remains consistent throughout and is reflected in the 

administrative record. As early as 2015, in response to pre-listing options raised by 

appellants through ACC, the Department explained it did not believe voluntary programs, 

including attempts at enforceable agreements, are appropriate alternatives to identifying a 

product as a priority product. The Department explained the strategies covered by the 

proposed agreements were already at least partially available nationally, would not ensure 

equal coverage of all potential manufacturers, and might not be enforceable under the 

law. Particularly with respect to coverage, the Department noted the proposed 

framework creates problems for the Department and “also leaves product manufacturers 

who have signed onto the alternative process proposed here at a disadvantage to those 

who have not signed on.” In contrast, regulatory coverage would ensure “any new 

product manufacturer would still be a responsible entity and would need to comply with 

the regulatory requirements” to sell products in California.

In 2017 ACC comments, appellants noted that the Department “described three 

possible alternatives to the current proposal, including the industry’s proposed alternative 

to the regulation” but argued they disagreed with the Department’s conclusion that 

voluntary programs would not achieve the purpose of the Green Chemistry law. In its 

final statement of reasons, the Department again rejected the industry’s proposal of 

voluntary action, explaining “it does not advance the goals of the [Safer Consumer 
43.

Product] regulations in general and of this proposed regulation in specific: to drive 

[spray foam] systems manufacturers to find safer alternatives to MDI in [spray foam 

systems] while avoiding regrettable substitutions. Additionally, voluntary initiatives are 

not enforceable.”

The Department’s concerns track the language of the underlying statutory scheme 

and the practical realities of the regulatory system in place. Health and Safety Code 

section 25252 requires that the Department “identify and prioritize those chemicals or 

chemical ingredients in consumer products that may be considered as being a chemical of 

concern” (Health & Saf. Code, § 25252, subd. (a)) and “develop criteria by which 

chemicals and their alternatives may be evaluated” (Health & Saf. Code, § 25252, 

subd. (b)(1)). Similarly, Health and Safety Code section 25253 requires that the 

Department “establish a process for evaluating chemicals of concern in consumer 

products, and their potential alternatives, to determine how best to limit exposure or to 

reduce the level of hazard posed by a chemical of concern” (Health & Saf. Code, 

§ 25253, subd. (a)(1)) and “establish a process that includes an evaluation of the 

availability of potential alternatives” (Health & Saf. Code, § 25253, subd. (a)(2)). Only 

once this review is complete does the Department determine what regulatory responses 

are required, if any. (Health & Saf. Code, § 25253, subd. (b).) As discussed more fully 

above, the regulatory structure adopted identifies chemicals with known toxicities and 

then seeks to identify a limited number of high priority products utilizing one or more of 

those chemicals so that the state may leverage manufacturers of those products when 

conducting alternatives analyses and deciding on appropriate regulatory actions.

Accordingly, in light of the requirements of the authorizing statutes and regulatory 

scheme in place, the suggestion that enforceable consent agreements be used in place of 

listing spray foam systems as a priority product was not a reasonable alternative. Failing 

to list spray foam systems as a priority product would result in the Department not 

conducting the alternatives analysis for the underlying chemicals required under the 
44. 

statutes, undermine the prioritization process for chemicals utilized in consumer products 

required by the statutes, and curtail the Department’s ability to impose any appropriate 

regulatory responses under the regulatory scheme adopted to implement the relevant 

statutes. Further, only those that enter into agreements could be governed by their terms, 

leaving new market entrants and holdouts to different standards than signatories. In this 

way, the Department’s identified concerns show the use of enforceable consent 

agreements would not be equally effective in achieving the purpose of the statute and 

would not fully comply with the authorizing statutes. The record evidence shows the 

Department reviewed the proposed alternative and determined it was not reasonable. We 

agree with this conclusion. As an unreasonable alternative, the proposal did not trigger 

any statutory obligation under the APA to have the Department identify and discuss 

enforceable consent agreements as a reasonable alternative to the listing decision.7

Appellants’ CEQA Claim Is Untimely 

As noted at the outset, this case consists of a cross-appeal filed by the Department 

over appellants’ CEQA claim. The Department argues both that this claim was timebarred and that the trial court erred in concluding the Department violated CEQA when it 

determined that its priority product listing determination was exempt from CEQA. 

Ultimately, we agree with the Department that appellants failed to timely file their CEQA 

claim. As such, we do not reach whether appellants’ claim of a CEQA violation was 

correct. 

7 Having reached this determination, the court need not reach whether the Department 

correctly considered whether it has authority to enter into such agreements in the first place. The 

court notes, however, that the allegedly authorizing statute, Health and Safety Code 

section 25180, subdivision (d), refers to “enforcing” laws contained within the relevant chapter 

and specifically points to examples such as imposing penalties, referring violations for 

prosecution, settling cases, and adopting enforcement policies. The court does not readily see 

how identifying priority products under the current regulations falls within the Department’s 

enforcement authority and, thus, how the Department could enter into an enforceable agreement 

with manufacturers in lieu of the listing decision.
45.

Additional Relevant Facts

As noted in the court’s initial factual recitation, the Department drafted and 

published the Exemption Notice from CEQA when reaching its decision to list spray 

foam systems as a priority product.8 At the outset of the regulatory process, the 

Department explained in its initial notice of proposed regulatory action that it had 

“determined that this rulemaking project is exempt under CEQA (Pub[.] Resources 

Code[, §] 21000[] et seq.). This rulemaking meets the General Rule Exemption available 

under Section 15061[, subdivision] (b)(3) of Title 14 of the California Code of 

Regulations. A draft Notice of Exemption [] is available for review with this rulemaking 

file and will be filed with the State Clearinghouse when the regulations are adopted.” 

The Department then received public comments alleging it was not properly complying 

with CEQA as part of its overall regulatory process. The Department made no changes to 

its CEQA position based on the comments and ultimately rejected them when issuing its 

final statement of reasons in February 2018.

Shortly thereafter, the Department sent its proposed regulatory package to the 

Office of Administrative Law. On April 26, 2018, the Office of Administrative Law 

endorsed, approved, and filed the regulatory package. And on May 1, 2018, the 

Department issued an alert stating that spray foam systems would be listed as a priority 

product effective July 1, 2018.

On May 30, 2018, ACC started the informal appeal process designated in title 22,

section 69507.1. ACC proceeded through the full regulatory dispute resolution process 

until their concerns were finally rejected on February 25, 2019. Appellants then filed a 

petition for writ of mandate on August 9, 2019.

8 Although the Exemption Notice was drafted and published, there is no dispute that it was 

not forwarded to the Office of Planning and Research or any other government agency relevant 

to the CEQA analysis. As such, the publication did not potentially trigger a shorter statute of 

limitations than the 180-day period discussed below.
46.

The Department filed a demurrer. In its filing, the Department argued that 

appellants’ CEQA claim was time-barred because it had not been filed within 180 days of 

the Office of Administrative Law’s endorsement, approval, and filing of the regulatory 

package. Relevant to a dispute raised in this appeal, the Department also sought to 

dismiss all claims raised by General Coatings, including by implication the CEQA claim, 

on the ground there was no proof that General Coatings exhausted its administrative 

remedies. The trial court overruled the demurrer with respect to the timeliness claim, 

finding the Department’s decision was not final until completion of the regulatory 

appeals and therefore that the statute of limitations did not begin to run until that time. 

The court sustained the demurrer with respect to General Coatings, however, concluding 

there was no evidence it had exhausted its administrative remedies. The court’s analysis 

relied on a conclusion that completing the Safer Consumer Products regulations’ dispute 

resolution procedures was required before filing suit. The Department again raised the 

issue of timeliness as a part of its briefing in opposition to the writ of mandate. In that 

position, the Department argued the trial court had incorrectly concluded the Green 

Chemistry law’s regulatory proceedings applied to CEQA issues. The trial court again 

rejected the timeliness argument, reiterating its finding that the statute of limitations had 

been tolled before noting that the issue had previously been resolved and refusing to 

reconsider that ruling.

Standard of Review and Applicable Law

In circumstances similar to this case, where the relevant agency has determined its 

project is exempt from CEQA, a party has 180 days from the approval of the project to 

file suit if the public has not been given the required notice that the project is exempt 

from CEQA. (See Pub. Resources Code, § 21167, subd. (d) [“If the notice has not been 

filed, the action or proceeding shall be commenced within 180 days from the date of the 

public agency’s decision to carry out or approve the project.”].) Although the language 

of the relevant statute can be confusing, both the CEQA Guidelines and the case law 
47.

consistently interpret it to set a 180-day statute of limitations regardless of the basis for 

the exemption finding. (See CEQA Guidelines, § 15112, subd. (c)(5)(A) [“The statute of 

limitations periods under CEQA are as follows: [¶] ... [¶] (5) Where; none of the other 

statute of limitations periods in this section apply, 180 days after ... [¶] (A) The public 

agency’s decision to carry out or approve the project.”]; City of Chula Vista v. County of 

San Diego (1994) 23 Cal.App.4th 1713, 1719–1720 [“If an agency determines a project is 

categorically exempt from the environmental review requirements of CEQA and 

proceeds to approve the project, any party objecting that such determination was 

improper must file an action within 35 days after a valid [notice of exemption] has been 

filed by the agency. If none was filed or the [notice of exemption] is defective in some 

material manner, the filing period for actions is limited to 180 days after the project is 

approved.”]; Save Lafayette Trees v. East Bay Regional Park Dist. (2021) 66 Cal.App.5th 

21, 40 [“Our Supreme Court has held that when an agency approves a project without 

filing either a notice of determination [] as to whether a project will have a significant 

environment impact or a[ notice of exemption] as to whether a project is statutorily 

exempt from CEQA, [Pub. Resources Code, §] 21167 nonetheless ‘permits a legal 

challenge to be brought up to 180 days after the agency’s decision or commencement of 

the project,’ which ‘is deemed constructive notice for potential CEQA claims.’ ”].)

Where the underlying facts are not disputed, we review a finding regarding the 

applicability of CEQA’s statute of limitations de novo. (Cumming v. City of San 

Bernardino Redevelopment Agency (2002) 101 Cal.App.4th 1229, 1232–1233.)

Appellants’ CEQA Claim Was Not Timely

Neither party in this case contests that a 180-day statute of limitations applies. 

Rather, the core dispute is when that period began to run. Underlying that determination 

is a dispute over whether the Safer Consumer Products’ regulatory structure for 

administrative appeals covers CEQA issues.
48.

The general principle that one must exhaust administrative remedies is applicable 

in CEQA cases. Indeed, CEQA itself has a core exhaustion requirement which precludes 

actions unless one has raised the CEQA issue during a required public comment period. 

(Pub. Resources Code, § 21177, subd. (a) [“An action or proceeding shall not be brought 

pursuant to [Pub. Resources Code, §] 21167 unless the alleged grounds for 

noncompliance with this division were presented to the public agency orally or in writing 

by any person during the public comment period provided by this division or before the 

close of the public hearing on the project before the issuance of the notice of 

determination.”]; see Tomlinson v. County of Alameda (2012) 54 Cal.4th 281, 291 [“the 

exhaustion-of-administrative-remedies requirement set forth in subdivision (a) of [Pub.

Resources Code §] 21177 applies to a public agency’s decision that a proposed project is 

categorically exempt from CEQA compliance as long as the public agency gives notice 

of the ground for its exemption determination, and that determination is preceded by 

public hearings at which members of the public had the opportunity to raise any concerns 

or objections to the proposed project”].) CEQA does not, however, require an 

administrative appeal as part of its administrative exhaustion requirements. (McCann v. 

City of San Diego (2021) 70 Cal.App.5th 51, 76 [Pub. Resources Code, “[§] 21177 

addresses the exhaustion of administrative remedies in CEQA cases, but it does not 

prescribe a specific appeal process following a determination a project is exempt from 

CEQA”].) Rather, several “cases recognize that when an agency elects to adopt an 

administrative appeal process, the common law rule requiring the exhaustion of 

administrative remedies applies to CEQA litigation and the scope of the remedy is 

‘determined by the procedures applicable to the public agency in question.’ ” (McCann,

at p. 77.)

In these cases, however, the administrative procedures adopted specifically 

include review of CEQA determinations. (See Tahoe Vista Concerned Citizens v. County 

of Placer (2000) 81 Cal.App.4th 577, 582, 592 [exhaustion requirement not met where 
49.

the appellant failed to check box for raising CEQA dispute in administrative appeal];

California Clean Energy Committee v. City of San Jose (2013) 220 Cal.App.4th 1325, 

1345 [administrative appeal process specifically references environmental impact report]; 

but see San Bernardino Valley Audubon Society, Inc. v. County of San Bernardino (1984) 

155 Cal.App.3d 738, 747–748 [questioning whether right to appeal “land use decision” 

would cover CEQA requirement before rejecting lack of exhaustion argument on 

different grounds].) Moreover, even where an appeal was possible but not taken, 

exhaustion was excused where the final decisionmaker was informed of the dispute and 

held public hearings on issues raised. (See California Clean Energy Committee, at

pp. 1347–1348 [administrative exhaustion satisfied despite lack of appeal from initial 

decision where final decisionmaking body presented arguments, held public hearings, and 

directly responded to issues when adopting environmental impact report].) In context, 

then, the case law shows full exhaustion of an agency’s administrative appeals process is 

only required in a CEQA case when the agency has crafted administrative proceedings 

that include CEQA issues within their scope. If no such decision has been made, 

CEQA’s core exhaustion requirements control and there is no obligation to 

administratively appeal an adverse determination. For this reason, the deadline for filing 

a CEQA action in this case turns on whether the administrative remedies covered by the 

Green Chemistry law regulations include review of CEQA issues or whether the standard 

CEQA exhaustion requirements are all that are needed to exhaust administrative 

remedies.

Turning to the administrative dispute resolution process for the Safer Consumer 

Products regulations, this court sees no indication that CEQA issues are included within 

its provisions. The overall process is set out at title 22, sections 69507 through 69507.6. 

From the outset its scope is limited. The initial applicability statement limits the process 

to only resolving disputes by responsible entities over decisions made by the Department 

under the Safer Consumer Products regulations. (Tit. 22, § 69507, subd. (a) [“[t]his 
50.

article applies to any responsible entity that wishes to dispute a decision made by the 

Department under this chapter that applies to the responsible entity”].) The statement on 

exhaustion limits itself to “resolving disputes arising under this chapter,” and the 

statement of scope further limits the range of issues by excluding from review decisions 

“made by the Department under article 2, 4, or 9” of chapter 55.9 (Tit. 22, § 69507, 

subds. (b), (c).) Even the automatic stay is limited; not to any regulatory process but 

rather to requirements “imposed by the Department under this chapter on a responsible 

entity, and any posting concerning the requirement on the Failure to Comply List.” 

(Tit. 22, § 69507, subd. (d).)

The informal dispute resolution process and appeal to the director include similar 

limitations on the scope of the dispute resolution process. An informal dispute resolution 

request is limited to “a dispute regarding a decision made by the Department under the 

provisions of this chapter other than article 6” of chapter 55, while the appeal to the 

director is limited to issues raised in the informal process and requires “reasons why the 

decision does not comply with this chapter or is otherwise unreasonable.” (Tit. 22, 

§§ 69507.1, subd. (a), 69507.2, subd. (a).) The resolution of the appeal to the director 

additionally notes that if relief is denied, the director must specify “the date by which the 

responsible entity must comply with the requirements of this chapter that were in 

dispute.” (Tit. 22, § 69507.2, subd. (c)(2).) The remaining aspects of the dispute 

resolution process create a separate and unique process for “disputes regarding a decision 

made by the Department under article 6” of chapter 55, which covers final regulatory 

responses. (Tit. 22, § 69507.3; see tit. 22, § 69506.)

Taken together, the court finds no basis to conclude that the regulations are 

intended to or do include provisions for resolving disputes arising under CEQA. Rather, 

9 These articles cover the process for identifying candidate chemicals, the petition process 

for identification and prioritization of chemicals and products, and trade secret protections. (See 

tit. 22, §§ 69502, 69504, 69509.)
51.

the regulations provide a dispute resolution process for only a limited set of issues that 

can arise under the broader regulatory scheme, specifically those issues that are most 

likely to directly impact responsible entities. Broader issues within the regulatory 

scheme, such as generating the list of chemicals necessary to identify product/chemical 

combinations or seeking trade secret protections, are separated and subjected to different 

procedures. Indeed, with trade secret decisions, the regulations authorize quick judicial 

review.

This structure supports the Department’s assertion that CEQA issues are not 

subject to the regulatory dispute process. CEQA is a separate statutory scheme that 

contains its own process for exhausting administrative remedies. The dispute resolution 

process in the Safer Consumer Products regulations readily limit themselves to only a 

subset of potential issues that can arise under the various chapters included therein. It 

would be incongruent with that structure to conclude, as argued by appellants, that the 

phrase “a decision made by the Department under this chapter” covers ancillary issues 

arising under separate statutory schemes merely because they are potentially triggered by 

a decision under the Safer Consumer Products regulations. Accordingly, we reject 

appellants’ claim that they were obligated to exhaust their administrative remedies under 

the Safer Consumer Products regulations in order to file their CEQA claim.

This determination does not resolve the statute of limitations dispute, however, as 

there still remains a question as to when the statute begins to run. Although not required 

to exhaust their administrative remedies under the Safer Consumer Products regulations, 

appellants note that they did raise issues under that process and that the regulations do not 

allow for final agency decision until that process is complete. (See tit. 22, §§ 69507.1, 

subd. (a) [“[i]f a request for informal dispute resolution is not received within thirty 

(30) days of the notice ..., the Department’s decision is final”], 69507.2, subd. (d) [“A 

decision issued under [§ 69507.2, subd.] (c) is the Department’s final decision and is not 

subject to additional administrative dispute resolution.”].) Appellants thus contend the 
52.

statute of limitations did not begin to run until their regulatory appeal was complete. We 

do not agree.

“ ‘The limitations period starts running on the date the project is approved by the 

public agency and is not retriggered on each subsequent date that the public agency takes 

some action toward implementing the project.’ ” (Citizens for a Green San Mateo v. San 

Mateo County Community College Dist. (2014) 226 Cal.App.4th 1572, 1594.) Under the 

CEQA Guidelines, “approval” “means the decision by a public agency which commits 

the agency to a definite course of action in regard to a project intended to be carried out 

by any person. The exact date of approval of any project is a matter determined by each 

public agency according to its rules, regulations, and ordinances. Legislative action in 

regard to a project often constitutes approval.” (Cal. Code Regs., tit. 14, § 15352, 

subd. (a).) “ ‘Generally speaking, an agency acts to approve a proposed course of action 

when it makes its earliest firm commitment to it, not when the final or last discretionary 

approval is made.’ [Citation.] Approvals under CEQA, therefore, are not dependent on 

‘final’ action by the lead agency, but by conduct detrimental to further fair environmental 

analysis.” (John R. Lawson Rock & Oil, Inc. v. State Air Resources Bd., supra,

20 Cal.App.5th at p. 99.)

In this case, the Department contends the project was approved no later than the 

point at which the regulatory packet was approved and filed by the Office of 

Administrative Law. While we do not agree that event marks the approval of the project, 

we do agree that the date could be no point later. By the time the Office of 

Administrative Law approved and filed the regulatory packet, the Department had 

publicly indicated its intent to list spray foam systems as a priority product, taken and 

responded to comments from the public on that decision, indicated that it believed the 

project was exempt from CEQA requirements, and released its final statement of reasons 

for the action. At that point, the Department had clearly made a firm commitment to its 

planned listing. Indeed, having claimed to have reviewed the project for CEQA issues 
53.

and found it exempt, then finalized the determination despite comments raising CEQA 

objections, there is no doubt that the Department had reached the point where its conduct 

was detrimental to further fair environmental analysis. At that point, the project had been 

thoroughly vetted and approved. The statute of limitations to raise a CEQA claim thus 

began to run no later than the point the Office of Administrative Law approved and filed 

the regulatory packet. As this date was April 26, 2018, and the CEQA claim was not 

filed until August 9, 2019, the claim was untimely under CEQA’s 180-day statute of 

limitations.

Finally, we reject appellants’ argument that the Department has changed its 

position from trial and should therefore be precluded from arguing the CEQA claim was 

untimely. The court has reviewed the Department’s filings before the trial court and 

notes that the Department has consistently argued appellants’ CEQA claim should be 

time-barred because it was not filed within 180 days of when the regulatory packet was 

approved and filed by the Office of Administrative Law. The trial court ultimately found 

that the CEQA claim was timely based on its belief that the Safer Consumer Products 

regulations applied to CEQA claims. However, this position does not appear to be tied to 

a position taken by the Department, but rather to appellants’ direct argument in 

opposition that “before [appellants] could challenge [the Department]’s determination 

that the listing of [spray foam s]ystems is exempt from CEQA, they first were obligated 

to exhaust administrative remedies before [the Department].” Indeed, the Department 

specifically argued that “on its face, the [Safer Consumer Product] Regulations’ 

exhaustion requirement, which applies only to ‘a decision made by [the Department]

under this chapter’ does not apply to [appellant]s’ CEQA claim.” Given this argument 

history, we find no basis to preclude the Department’s argument based on a change in 

position.
54.

DISPOSITION

The judgment is affirmed with respect to the first, second, and third causes of 

action seeking relief based on allegations the Department exceeded its authority through 

the listing determination and allegations the Department violated the APA. The 

judgment is reversed with respect to the fourth cause of action, under CEQA, and 

remanded with instructions that the trial court dismiss the claim as untimely.

Costs are awarded to the Department.

HILL, P. J.

WE CONCUR:

DETJEN, J.

PEÑA, J.
Filed 12/12/22

CERTIFIED FOR PUBLICATION 

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA 

FIFTH APPELLATE DISTRICT 

AMERICAN CHEMISTRY COUNCIL et al.,

Plaintiffs and Appellants, 

 v. 

DEPARTMENT OF TOXIC SUBSTANCES 

CONTROL et al., 

Defendants and Appellants. 

F082604 

(Fresno Super. Ct. No. 19CECG02938) 

ORDER GRANTING REQUEST 

FOR PUBLICATION 

As the nonpublished opinion filed on November 18, 2022, in the above-entitled 

matter hereby meets the standards for publication specified in the California Rules of 

Court, rule 8.1105(c), it is ordered that the opinion be certified for publication in the 

Official Reports. 

HILL, P. J. 

WE CONCUR: 

DETJEN, J.

PEÑA, J.